The state chronicle. [volume] (Raleigh, N.C.) 1883-1893, 1887-11-03
THE VIRGINIA BOND CASE.
I'll IL CLEA REST AND MOST IIClp
SIATEMENT OF THE IItif: ALTON
Ihe Questions that are Row ssefor. The
courts Nay Perhaps he OF Interest TO
the Chronic!. Readers.
From Fay etteville Observer.1

The litigation in Virginia upon the State
debt question should be OF great interest
to all North Carolinians. We can never
know when we ourselves may be confront
| ed with the same great issue. Our own
| state bondS-the new consolidated fours''
have precisely the same feature (the tax
recelvablity of their coupons) that has
caused so much trouble in Virginia. and if
1t should ever happen that we shall be un-
able to pay the maturity. interest upon
| these bonds, we may be compelled, in or
der to protect our State Treasury, to adopt
some OF the same kind of legislation which
our sister State has been using, hitherto
| with such i'll success, thanks to Judge
| Bond. In addition to this reason. personal
| TO ourselves the questions that are now at
Issue before the courts are of such far
reaching Importance that perhaps sketch
| OF the legislation and the resulting litiga-
| ton may not be unlnterestng to some of
your readers.
l. AS the coupons attached to the bonds
known as the Funded Debt" of Virginia
are by law receivable in payment OF taxes,
and as they exceed in amount several
years taxes, the State would be bankrupt
II 1t did not find some way of keeping
| them out of the treasury SO the whole
| object of the State debt legislation las
been to prevent the use of coupons in pay
Ing State taxes, and thereby to force the
creditors to compromise. and the object
| OF the litigation by the creditors has been
| TO force the State to accept the coupons i'll
| payment of taxes, and thereby afford a
| market for their bonds OF course the
State could be compelled to receive none
| Dut genuine coupons, so the first effort was
to require the taxpayer TO prove the gen
ulneneSS OF the coupons before a tender to
the taX-collector, and an act (conmouIy
known as Coupon Killer No. - Was
passed by the Legislature of Virginia re
| qulrlng this to be done. But in the Gases
before him, brought by taxpayers who
| had rendered coupons. and whose property
had nevertheless been levied upon by the
collectors. Judge Bond held that the con
| tract between the State and the holder of
the coupons Was self-eXecuting; that, upon
the tender OF coupons for State taxes, ipso
faotO the taxes We're paid, that in his suit
for damages the coupon-tenderer was not
limited merely to the value of the property
| levied upon, but that he could sue the col
| leotor as IA mere trespasser for punitive
damages IN any amount, as to exceed
| the sum necessary to give the Federal
| Court jurisdiction. As Judge Bond has
been sustained in these rulings 10y the L.
5. Supreme Court, it seems that upon the
first round the bond holders unquestiOn-
ably obtained the advantage; so, after
paying few heavy judgments with costs,
the State authorities found it not a paving
business, and, IN attempting to find an
other loop hope of escape, invented.
IL. Coupon Killer No. ,. As the tax
payers are very numerous, and the bonds
are held by few persons, mostly residents
| of England, in order to use the coupons it
is absolutely necessary to sell them. SO to
prevent the sale Of coupons, and thereby
their use IN paying taxes, the Legislature
passed an act requiring every person VINO
desired to sell coupons to procure State
license, paying therefore 81, 900 as a license
fee, and making it a misdemeanor to sell
coupons without license; and also an act
amending the crime of barratry 50 as to
make it include the advising, aiding or
abetting another in selling coupons or using
them III the payment of taxes. Out of this
legislation arose a most complicated amt
absurd series of actions and cross actions
1st, The Grand Jury indicted the agent
and attorney of the bond holders for sell
ing coupons without license, and for bar
ratry in bringing suits against officers of
the State; and said attorney was cOnyictcd
and fined $50; end, The bond holders at
torney then sued the Grand Jury for i'll
di, ting him under an unconstitutional act
3rd, A second Grand Jury indicted the at
torney for the bond holders for intimidat-
ing the first Grand Jury by suing them.
and said attorney was convicted and sent
to Jail; 4th, Said attorney then procured
a writ of habeas corpus from Judge Bond,
obtained his release from jail, and, 9th,
Sued the second Grand Jury and common
wealth's attorney for false imprisonment
AS the bond holders seem to have come out
first best" on this round also-though at
considerable inconvenience to their cOun-
sel-at their last session the Legislature,
with great flourish, brought forth,
III. Coupon Crusher No /. Whether it
will be another instance Of the mountain
in labOur,' &c, remains to be seen. As
the coupon holder could not be compelled
to prove its genulneneSS before a tender, II
the commemorative attorneys, by this act,
were required to bring suits in the name
of the State against all persons who there
after rendered coupons III payment of taxes,
ostensibly for the purpose of testing the
genuiness of the coupons. 1t was further
enacted that in these suits the burden of
proof should be upon the coupon-tender9r,
} the defendant. That in order to prove the
genuinenesS of the coupons, the bonds from
which they were cut must be produced i'll
Court That no expert testimony should
be competent; and that no matter how the
case went, the defendant was to pay the
costs, including a fee to the common
, wealth's attorney for bringing the suit. In
|
sued to prove the genuineness Of his cou-
pons, the law being so changed at the
same time as to make that an impossible
ity, and he being required to pay the costs
of proving its impossibiity, together with
a bonus to the other side. As the damages
to the coupon -tenderer in these suits could
only be the face Of the coupons and costs,
it was thought that the Federal Courts
| could not acquire jurisdiction. Actions
were brought under this law in the State
Courts against persons rendering coupon.
for taxes and judgments obtained in sew
: eral instances. No appeals could be taker
, to or suits brought in the Federal Court,
by the coupon -tenderers for want of juris
, dictiOn.
In order to avoid this objection the bond
t holders themselves brought an action il
the Federal Court, alleging that the ''COu
{ pom -crusher' act was unconstitutional IL
2 that it impaired the obligation of the States
contract with the bond holder, and thai
the effect of it's enforcement would be tt
: destroy the value of their bonds; and 81
t obtained an order from Judge Bond en-
joining the State authorities from attempt
ing to enforce the act. To test the ques
ton of jurisdiction the Attorney Genera
of Virginia refused to obey Judge Bond
Injunction, and by continuing to brin
t suits, put himself in contempt of Court
4 IL